Tuesday, March 17, 2009


Am I the only one who sees what's going on here? Insurance giant AIG takes tax payer money for the purpose of staying in business because the government deemed them "too big to fail". After being bailed out, they continue to grant multi-million dollar bonuses to their executives. Consequently, Congress and the new administration are "outraged" at the audacity of AIG to spend tax payer's money in such a way. According to the media, the people are even more outraged and are sharpening their pitch forks as we speak.

Now, let's look at the real story. Yes, AIG did take the money. Yes, they did pay their executives fat juicy bonuses. But unfortunately for the Obama camp, this happened because of provisions spelled out in Obama's own stimulus bill. Don't get me wrong, I always think it's a good idea to throw a piece of legislation together at the last minute, and pass it without sufficient study, especially when it will involve trillions of dollars and risk the future of our nation. But maybe someone should have read this particular legislation before they gave the green light to the public shaming of a private American corporation.

You see, the bonuses paid to AIG executives were the result of contracts signed before the bailout. That means that AIG was obligated under the law to pay them out. But it gets better. The provisions that allowed them to pay these bonuses which are spelled out in the stimulus package, were actually written by the same people who are faking "outrage" today. The usual suspects, Frank, Pelosi, Dodd, etc...love those Democrats.

If these people were only pretending to be mad at AIG, this really wouldn't be much of a story. Unfortunately, they aren't stopping there. Like lemmings, there are both Republicans and Democrats that have taken the bait of moral outrage and are offering ways to "get even". Some are suggesting that the bonus money be taxed at a rate as high as ninety percent. One New York Attorney General has demanded under deadline and subpoena the names of those who received the bonuses. A sitting President has publicly shamed and threatened private citizens with the full power of his office. Obama spoke of AIG not abiding by the principals of this nation (paraphrased). Really? I was not aware that breaking contracts was an American principal. I was also not aware that reaction on the basis of emotion by Congress and the office of the President was an American principal either.

We've gone beyond the subtle stoking of class warfare, and are now entering the world of George Orwell's "1984". The fact that the government is majority share holder of ANY private company is bad enough, not to mention unconstitutional, but when they threaten to use that power to make collective business decisions for that private company, then we're all in trouble.
Besides, wasn't the goal of the stimulus bill to stimulate the economy? Why should the government care which American citizen happens to spend the stimulus money, so long as it goes back into the economy somewhere? They're acting as if these bonus recipients are going to light the money on fire when they get it, as opposed to spending it on something like cars, boats or houses.

Years from now, after most (if not all) businesses are taken over by the government, we can all sit back and marvel at how we showed those evil rich people a thing or two...as we're standing in line hoping they don't run out of our government issued food rations. Hope you like potatoes.


Kofi Bofah said...

You are right - there were holes in that bill. It had no teeth.

Funny how Dodd and Geithner are taking shots at each other.

They are both on the hot seat.

Seane-Anna said...

Hey Roadie! This is about the clearest explanation of the AIG bonus fiasco I've read or heard. Good on you! And can I repost this on my blog?

Roadhouse said...

As always, be my guest.

Marty Robinson said...

This is brilliant writing ... you totally nailed this whole thing.